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Addio Pizzo": Can a Label Defeat the Mafia?

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Addio Pizzo Copyright 2008. No quotation or citation without attribution. IR/PS CSR Case #08-10 “Addio Pizzo”: Can a Label Defeat the Mafia? By: Chiara Superti GRADUATE SCHOOL OF INTERNATIONAL RELATIONS AND PACIFIC STUDIES UNIVERSITY OF CALIFORNIA, SAN DIEGO Prepared for Professor Peter Gourevitch Edited by Kristen Parks Corporate Social Responsibility Fall 2008 Abstract The Mafia in Sicily has important socio-economic effects on the local population. In particular, this paper focuses on the practice of asking for a “protection tax”, or pizzo, paid by around 70% of the businesses in the region. In 2005, a group of Palermitan young professionals created an organization named Addiopizzo (goodbye pizzo) with the specific goal of fighting the phenomenon of money extortion. They invented a label that certifies businesses of any kind that can prove they are not paying the pizzo. Using the resources offered by the market and the institutions, involving consumers, businesses, the police and schools, Addiopizzo was able to start a successful new trend of pizzo-free consumption. Copyright 2008. No quotation or citation without attribution. 2 Table of Contents Introduction....................................................................................................................... 3 Methodology ...................................................................................................................... 6 The Origins of the Organization...................................................................................... 6 Anti-Mafia movements: a Collective Action Problem.................................................... 7 A Strategy to Overcome the Collective Action Problem ............................................... 9 The First Step: Consumers.............................................................................................. 9 The Business: the Label and the Process of Certification ............................................ 11 The Institutional Side: The Monitoring Process ........................................................... 14 The Outreach Program ................................................................................................. 15 An Example of Credibility Building.............................................................................. 16 Publicity and Visibility.................................................................................................. 17 Transparency and Various Sources of Funding............................................................ 18 Endorsement by the Consumer Organizations.............................................................. 19 The Idealistic Component.............................................................................................. 20 Beyond Sicily: Taking the Cause Outside the Border of Sicily .................................. 21 Weaknesses of the Project.............................................................................................. 21 Conclusions...................................................................................................................... 22 Discussion Questions....................................................................................................... 24 References........................................................................................................................ 25 Appendix A: CONSUMERS’ MANIFESTO ............................................................... 27 Appendix B: “Addiopizzo” BALANCE SHEET 2007................................................. 28 Appendix C: Statistics from SOS Confesercenti.......................................................... 29 Copyright 2008. No quotation or citation without attribution. 3 …La mafia è un fenomeno umano e come tutti i fenomeni umani ha un principio, una sua evoluzione e avrà quindi anche una fine. […The Mafia is a human phenomenon and as all the human phenomena it has a beginning, an evolution and it will also have an end.] 1 GIOVANNI FALCONE Introduction The Mafia in Sicily and in other Southern regions like Calabria (‘ndrangheta), Puglia (Sacra Corona Unita) and Campania (Camorra), has been rooted in society since before the creation of the Italian State. Many scholars2 identified historical reasons for this phenomenon in the Spanish Habsburg’s domain since the late 16th century and in a lack of effective political rule over the territory that created a sense of the absence of the state that has continued until today. The Mafia built a monopolistic control of the society in all of its aspects, from the economy to politics, through the use of violence and corruption. On the political side, the existence of illicit connections between the Italian political world and the Mafia is well known. A research made by Eurispes3 in 1994 revealed that the Mafia controlled 400,000 votes in Sicily, one tenths of the total. This means that the Mafia’s preferences may have a decisive influence in the electoral results. 1 Giovanni Falcone was a famous judged killed by the Mafia in 1992. 2 Gambetta, Diego (2000) ‘Mafia: The Price of Distrust’, in Gambetta, Diego (ed.) Trust: Making and Breaking Cooperative Relations, electronic edition, Department of Sociology, University of Oxford, chapter 10, pp. 158-175, 3 Cowell, Alan, “Italians Voting, With Mafia, a Top Issue”, The New York Times, March 27 1994 Copyright 2008. No quotation or citation without attribution. 4 However, the economic impact of the Mafia phenomenon is no less worrisome. In fact, according to a report of the Confesercenti (an association representing small and medium enterprises of retail, tourism and services), the Mafia is the main enterprise of Italy with profits of around 30 billion Euros. Usury provides the main monetary inflow, but “racket,” the act of asking for “protection money” or pizzo that Mafia applies to any economic activity, is in second place with 10 billion Euros (see Figure 1).4 Figure.1: List of illegal activities and amount of money involved in that activity. The second column refers to the proportion of those activities that are managed by the Mafia. Typology of Amount % shopkeepers Illegal activity of managed involved money by the involved Mafia (in billions Euros) Usury 30 36% 150,000 Racket (pizzo) 10 95% 160,000 Steals and 7 15% 90,000 robbery Fraud 4.6 20% 500,000 Smuggling 2 80% 15,000 Counterfeit 7.4 70% Illegal 13 20% constructions Agromafia 7.5 Leasing and 6.5 contracts Gambling 2.5 80% TOTAL 90.5 45% Source: SOS Confesercenti/ Translation by Chiara Superti 4 “La mafia e’ la prima azienda italiana. Per SOS Impresa 90 mdl di utili all’anno.”, La Repubblica, October 22nd, 2007. Copyright 2008. No quotation or citation without attribution. 5 Besides representing one of the main sources of financial support of the criminal organization, the phenomenon of the pizzo also has important social and economic consequences in Sicily. In fact, it provokes an increase in the prices of the products or services that need to absorb the cost of the pizzo and also incentivize the use of cheaper illegal labor. Lastly the amount paid to the Mafia greatly decreases the actual profit of the business and it can impact seriously the sustainability of small enterprises. For many years the reaction of Sicilians was one of silent acquiescence. Many of those citizens that did not accept the status quo decided to emigrate to the North. Few stayed and fought against the Mafia, often paying high costs for that decision and becoming modern heroes like Giovanni Falcone and Paolo Borsellino, judges at the Palermo court who were killed by the Mafia in 1992. This tendency, however, is slowly changing and one of the outstanding examples of a new trend in anti-mafia movements is Addiopizzo. This organization was created three years ago by a group of young Sicilians. Through a joint effort between consumers and business, this organization works on the demolition of the important source of income that the pizzo represents for the Mafia in a town like Palermo, where around 80% of the businesses pay this “tax.” The NGO created a label to certify that the specific shop, restaurant, or bank does not pay the pizzo to the local mobsters. Today the program is limited to the area of Palermo, but the cities of Catania and Naples are activating similar initiatives. Copyright 2008. No quotation or citation without attribution. 6 The list of pizzo-free businesses includes more than 300 shops, restaurants, bars, companies, banks, enterprises and so on. Methodology For this research, the author was able to combine a wide spectrum of resources: from the official website of the organization (www.addiopizzo.com) to the numerous newspaper articles that talked about Addiopizzo’s case since 2004; from direct contact with a member of the organization that responded to an interview to part of the literature about the Mafia in Sicily. Abstracting from the great amount of journalistic information available, this paper presents the successful model that the organization was able to apply despite the sensitivity of the themes and introduces some of the weaknesses that Addiopizzo has yet to solve. As far as the specific literature about similar cases goes, the author was unable to find any other similar approaches to the fight against organized crime. The Origins of the Organization The organization started in 2004 in Palermo, Sicily. On the morning of June 29th, all over the city of Palermo, people found small stickers attached to their doors, windows, and garages. On the stickers
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